What is the Debt-to-Income Ratio?
Debt-to-income (DTI) is the share of your monthly income committed to debt repayment. Indian lenders call a close cousin of it FOIR, and it is usually the first number they compute — before your credit score, before your job history.
Rough bands: under 20% is excellent, 20–35% healthy, 36–43% borderline, and above 43% is where approvals start failing or rates get loaded.
Formula & worked example
Add every monthly obligation and divide by take-home pay:
Worked example: ₹85,000 income with ₹22,000 home, ₹9,000 car, ₹6,000 personal and ₹3,000 card minimum = ₹40,000 of debt. DTI = 40,000 / 85,000 = 47.1% — into risky territory. To reach a healthy 35% you would need to cut debt payments by about ₹10,250 a month.
How to use this debt-to-income ratio calculator
- Enter take-home income, after tax and PF.
- Include every EMI, plus rent if you do not own, and the minimum due on cards.
- Read the verdict band — it mirrors how an underwriter will see your file.
- Use the "cut needed" figure to plan which loan to clear first.
Smart tips
- Clear the smallest loan first if you want a quick DTI win — closing an account removes its whole EMI from the ratio.
- Credit card minimum dues count fully, even though they barely reduce your balance. Cards damage DTI badly.
- Do not close a loan by taking a new one; consolidation only helps if the new EMI is genuinely lower.
- Lenders recompute DTI including the new loan you are applying for, so leave headroom before you apply.
- Raising income improves DTI just as much as cutting debt — a documented salary hike or rental income both count.
Frequently asked questions
What is a good debt-to-income ratio?
Under 35% is healthy and gets clean approvals. Under 20% is excellent. Above 43% most lenders will decline or charge a premium rate.
Does rent count in DTI?
Lenders usually include rent when you do not own a home, since it is a fixed monthly obligation. Once you buy, the home loan EMI replaces it.
How do credit cards affect DTI?
The minimum due counts as a monthly obligation. Because minimums are small but balances persist, cards can quietly sit in your DTI for years.
Can I get a loan with a high DTI?
Sometimes, with a co-applicant, a larger down payment, a longer tenure or by pledging collateral — but expect a higher rate. Reducing DTI first is almost always cheaper.
Is DTI the same as FOIR?
Practically yes. FOIR is the term Indian lenders use for the same fixed-obligations-to-income calculation, typically capped at 40–55%.
Want the theory behind the numbers? Read our debt guides on the Money Blog.